Little Rock, Arkansas – Arkansas closed out its 2026 fiscal year on June 30 with a $655 million surplus, according to officials from the Arkansas Department of Finance and Administration (DFA), marking another strong year for state revenues and reserves.
The announcement, made Thursday, places the surplus among the largest in the state’s history. Officials said it is the fifth-largest surplus ever recorded in Arkansas, and a notable increase compared to the $367.9 million surplus reported in fiscal year 2025. The new fiscal year, FY 2027, officially began on July 1.
State financial data shows that overall revenue performance remained strong across multiple tax categories. Total gross collections for fiscal year 2026 reached $8.69 billion, an increase of $327 million compared to the previous year. After required deductions, including refunds for both individual and corporate taxpayers, the net available revenue stood at $7.15 billion.
Individual income tax remained the largest contributor to state revenue, bringing in $3.86 billion. State sales and use taxes followed closely behind at $3.67 billion, reflecting steady consumer activity and broader economic engagement across Arkansas.
Officials said the surplus has been transferred to the General Revenue Allotment Reserve Fund. This fund includes unrestricted surpluses from both current and prior fiscal years, along with investment earnings, serving as a key financial buffer for the state.
Arkansas’ reserve system continues to grow, with officials highlighting strong overall balance sheet performance. The state’s reserves now include the Catastrophic Reserve Fund at $1.814 billion, the General Revenue Allotment Reserve Fund at $1.221 billion, and the $1 billion Arkansas Reserve Fund Set Aside. Together, these funds bring total reserves to more than $3 billion.
State leaders described the surplus as evidence of continued economic strength and fiscal stability. Officials pointed to steady tax collections and controlled spending as key factors behind the results, along with what they described as long-term policy decisions supporting growth.
“Today’s announcement shows that conservative leadership works, and I look forward to continuing our close collaboration with the legislature to slow the growth of government, expand our economy, and responsibly phase out our state income tax,” Gov. Sarah Huckabee Sanders said.
Her comments reflected the administration’s broader focus on tax policy and long-term fiscal strategy, including efforts to reduce reliance on the state income tax over time.
Department of Finance and Administration Secretary Jim Hudson also pointed to strong economic activity as a driving force behind the surplus.
“Arkansas’ economic momentum is reflected in our FY26 results,” Department of Finance and Administration Secretary Jim Hudson said. “Personal income tax and sales tax collections were especially strong year over year, a sign that Arkansans are doing well.”
Hudson added further context on the state’s financial position, emphasizing the strength of reserve levels and overall stability heading into the new fiscal year.
“Our state’s reserves, totaling over $3 billion, are at record levels. Thanks to the policies of Governor Sanders, the Arkansas economy is strong going into Fiscal Year 2027,” Hudson continued.
The DFA noted that detailed revenue reports and additional funding information are available to the public through its official website, offering transparency into how state finances are collected, allocated, and managed.
As Arkansas moves into fiscal year 2027, officials say the strong surplus position provides flexibility for future planning, potential tax policy changes, and continued investment in state priorities.
